2007 has been the year of the merger in the coatings industry. Delta is now better placed to capitalize on increasing opportunities in the paint, primer and coatings sector
Written by Ian Armitage and Produced by Lenny Antoine
A developer and manufacturer of paints, primers and environmental coatings used throughout the OEM/General Industrial, container, color card and transportation industries, Delta Coatings Corporation is a leading liquid coating manufacturer.
2007 has shown an increase in merger activity in the sector and Delta is one of many companies to announce acquisition. In April 2007, it declared that it had acquired Federated Paint and Midwest Lacquer, a manufacturer of liquid coatings and lacquer paint products. The acquisition is intended to not only accelerate its financial and operational goals.
The sale of Federated Paint is a great example of buying a business in parts to maximize value. In this case, the transaction will result in synergistic cost savings for Delta and adds to its R&D and production capabilities. These synergies are anticipated to come from savings in raw materials, integration of manufacturing operations and other consolidation opportunities.
“With the addition of Federated Paint and Midwest Lacquer’s manufacturing sites, we will be able to increase our overall manufacturing facility considerably,” says Delta Coatings President John Bittle. “However, more importantly, we've inherited a great deal of expertise from our new employees. We are thrilled to have the team members of this highly educated and experienced organization join us – they add considerably to our operation."
Better position
Delta Coatings is now in a better position to produce new formulas and patent technologies and plans to capitalize on the best practices of each company to offer customers the most innovative technologies. “We are always looking at new acquisitions,” says John. “You have to grow with this industry and react to change, if not you fail.”
John, who has a wealth of industry experience, formed Delta Coatings along with Bob Madura in 1996 and are both delighted at the company’s growth. The acquisition will enable Delta to carry out his vision of promoting further corporate growth. “The acquisition will help us to build upon the successful foundation we have created here and will give us the added size we need to leverage our technology in new markets and applications,” says Bob Madura, Delta Coatings vice president and director of marketing.
Summarizing the work Delta does, Bob continues: “We are now located at Melrose Park, Ill., and develop and manufacture paint primers, water-based paints and water-borne coatings throughout the OEM/General Industrial, container, color card, and transportation. We also supply high solids coatings, FDA compliant coatings, lacquer, HAPS-free coatings, UV coatings, epoxy products, drum liners and wood primers.
“We have in excess of 20,000 formulas, which we can manufacture for virtually every industry imaginable,” he adds. “Look around your office and think about it – can you find one thing that doesn’t have a coating on it? You probably can’t. Where we are now is that we have the ability to coat at least 50 percent of all products produced if not more. So, we have vast potential. If anything, focusing and identifying the markets we want to be in as our main challenge because in our business you can literally make something for everyone. That is not a cost efficient way of going about it. It is really about identifying specific markets and trying to be the ‘go to guy’ in that market.”
Time of change
Both John and Bob have seen their fair share of change, but the vast amount of acquisitions and mergers that have taken place over the last five years are the likes of which neither has witnessed before. Putting environmental pressures aside, John believes, the consolidation in the market that this has caused has been the single biggest change in the industry. “The industry has changed considerably.
Competition is getting tougher, as companies merge to create stronger entities. Although, in terms of numbers, the amount of competition has decreased, it has actually gotten stronger as the level of competency and ability to react to industry change has gone up,” he explains.
Importantly, Delta is nimble enough to react quickly to changing consumer trends. It has the ability to identify a market and then go after it much quicker than most, becoming a leading player in the field relatively quickly. “We feel our competition can’t do that,” says John.
Environmental leadership equals potential
Delta Coatings is committed to maintaining a position of environmental leadership by developing products that comply with air permit requirements and EPA guidelines. Delta's broad product line includes some of the lowest volatile organic compounds (VOC) coatings available. Low VOC paints contain reduced levels of volatile organic compounds which emit smog-producing pollutants into the air.
“We are committed to being environmental leaders,” says Bob. “We have led by example and have always been at the forefront. We do a lot of R&D work focused on improving our environmental impact and this has led to the creation of a number of ‘green’ formulas.”
Its leadership in terms of the environment could provide huge growth potential for Delta, which is increasingly looking at expanding into overseas markets. “Finally the rest of the world, Europe excluded, is catching up when it comes to sustainability and the environment. There is a lot of potential for us to move into markets in the Pacific Rim and Asia, exporting environmental coatings to customers who are coming under increasing environmental pressures,” says John.
Given this potential for overseas growth, in addition to the potential the acquisitions have opened up in the US, John and Bob are extremely excited about the future. “We are looking forward to 2008,” stresses John. “Since we completed the acquisition in April, we have been waiting, planning our path and laying out an impressive program for the future.” Delta, it follows, is a true American success story.